Asian stocks and crypto stabilize as risk-off and liquidity fears dissipate, for now

Asia market update: Asian stocks and crypto stabilize as risk-off and liquidity fears dissipate, for now; GOOG backs Anthropic; Focus on UK BoE.

General trend and developments

- Asian equities opened up after yesterday’s steep falls, but still volatile, with Korea’s Kospi going from +3% to slightly negative just in the first hour, then back to 1.2% up during the session. Overall Asian stocks saw reasonable recoveries (although noting that the Shanghai Composite did close slightly up yesterday).

- Bitcoin and Ethereum continued to creep back up above yesterday’s crash down to early summer prices levels.

- Google said to be in early talks to invest more in Anthropic at a valuation of >$350B.

- Japan PM Takaichi reportedly considering a lower than expected extra budget amount of ~¥10T (early October estimates saw numbers ~¥13.9T).

- Japan labor cash earnings were inline. Although real cash earnings came in negative when a healthy positive number was expected. (BOJ Gov Ueda has previously called out the need for real wage rises to take hold in Japan as part of the bank’s target for the economy).

- On this theme, later in the session major Japan union UA Zensen confirmed it was targeting a 6% pay increase for regular workers next Spring.

- Australian exports bounced back from their Aug drop to be well up in September, with the Aussie trade balance producing the expected surplus. Noted that goods credits (exports) increased $3.3B (7.9%) driven by Non-monetary gold.

- In US-China trade news the US Grains and Bioproducts Chairman confirmed that a US sorghum shipment has been sent from US to China from last week, along with reports from traders that China has bought 120Kt of wheat for Dec delivery.

- UK Bank of England rate decision tonight.

- US equity FUTs flat to slightly down during Asia trading.

Looking ahead (Asian-weighted releases, using Asian time zone)

- Thu Nov 6th Thu night UK BOE Rate Decision.

- Fri Nov 7th JP Sept Household Spending, CN Oct Trade Balance, (Fri night US Nov Prelim Michigan Consumer Sentiment).

Holidays in Asia this week

- Mon Nov 3rd Japan.

- Wed Nov 5th India.

Headlines/economic data

Australia/New Zealand

- ASX 200 opens +0.4% at 8,836.

- Australia Sept Trade Balance (A$): 3.9B v 4.0Be.

- RBNZ Hawkesby: We won't think we are out of the worst yet on global trade tensions.

- New Zealand sells total NZ$450M vs. NZ$450M indices in 2029, 2035 and 20054 bonds.

China/Hong Kong

- Hang Seng opens +0.5% at 26,061; Shanghai Composite opens +0.1% at 3,973.

- US Grains and Bioproducts Chairman: Confirms a US sorghum shipment has been sent from US to China since last week - financial press.

- China said to have bought around 120Kt of US wheat for Dec shipment - traders.

- China MOF confirms pricing of $4.0B in USD denominated bonds.

- (FR) France govt begin procedure to suspend Shein in France, asks European Commission to open investigation of Shein's practices.

- China Commerce Ministry (MOFCOM): Ending anti-monopoly measures on some US optical fiber products, effective Sept 4th [overnight update].

- China Premier Li: Fluctuations in US-China agricultural trade are due to US tariffs [overnight update].

- China extends pause on export controls for over 16 US companies for another year – press [overnight update].

- Reportedly Chinese govt has issued guidance requiring new data centre projects that have received any state funds to only use domestically-made ai chips – Press [overnight update].

- (HK) Macau Leader Sam Hou Fai to deliver 2026 policy address on Nov 18th [overnight update].

- China PBOC sets Yuan reference rate: 7.0865 v 7.0901 prior.

- China PBOC Open Market Operation (OMO): Injects CNY93B in 7-day Reverse Repos; Net drains CNY250B v drains CNY492B prior.

Japan

- Nikkei 225 opens +1.3% at 50,897.

- Japan Sept labor cash earnings Y/Y: 1.9% V 1.9%E.

- Japan Oct Final PMI Services: 53.1 v 52.4 prelim (confirms 12th month of expansion).

- Japan Oct Tokyo Avg Office Vacancies: 2.6% v 2.7% prior [multi-year low].

- Major Japan union UA Zensen confirmed to target 6% pay increase for regular workers next Spring - press.

- Japan sells ¥3.5T vs. ¥3.5T indicated in 6-month Bills; Avg Yield: 0.5893% v 0.5933% prior, bid-to-cover: 3.04x v 3.14x prior.

- Japan PM Takaichi: To consider ways how Japan and the US can advance cooperation in the development of rare earth mining in the waters around the Minamitori Island.

- Japan PM Takaichi said to consider $65.0B (¥10.0T) economic stimulus package - Nikkei [update].

- Japan LDP lawmaker Yoshihiro Seki: Aiming to secure ¥1.0T per year for chips, AI budget.

- Ishin no Kai [Japan Innovation party; JIP] Co-Leader Fujita: early BOJ rate hike may give mixed signal to businesses.

- BOJ Outright Bond Purchase Operation for <1 Year; 1~3 Years; 3~5 Years; 10~25 Years and >25 Years; (Leaves purchase amounts unchanged).

- Berkshire Hathaway reportedly issues mandate for JPY-denominated bond offering.

- Japan said to consider raising the 'Flat 35' home loan borrowing limit - Japanese media;
The maximum loan for Japan's Flat 35 is ¥80 million.

- Japan Vice Fin Min and Top FX Diplomat Mimura: Recent Yen moves deviate from fundamentals; reiterates watching FX markets closely; Yen long positions have been shrinking after Summer [overnight update].

Korea

- Kospi opens +2.2% at 4,092.

- South Korea Sept Current Account Balance: $13.5B v $9.1B prior.

Other Asia

- (IN) India Oct Final PMI Services: 58.9 v 58.8 prelim (confirms 51st month of expansion).

- Philippines Sept Unemployment Rate: 3.8% v 3.9% prior.

- Vietnam Oct Trade Balance: $2.6B v $2.3Be.

- Vietnam Oct Retail Sales Y/Y: 7.2% v 11.3% prior.

- Vietnam Oct Industrial Production Y/Y: 10.8% v 13.6% prior.

- Vietnam Oct CPI Y/Y: 3.3% v 3.5%e.

- Thailand Fin Min Ekniti: Our financial system must keep pace or it will become a vulnerability.

- Taiwan Oct Foreign Reserves: $600.2B v $602.9B prior.

North America

- (AR) Argentina President Milei may keep the Peso (ARS) in widening band vs the USD until late 2027 - FT.

- (US) President Trump: We have to get beef prices down; heard the Supreme Court case [on tariffs] went 'well' today, it would be 'devastating' if we lost that case.

- US Treasury Sec Bessent: Came away from tariff hearings today very optimistic – Fox.

- (BR) Brazil Oct Services PMI: 47.7 v 46.3 prior (7th month of contraction).

- (US) OCT ADP EMPLOYMENT CHANGE: +42K V +30KE; Private employers added jobs in October for the first time since July; Sep revised higher.

- (US) Treasury quarterly refunding announcement: To sell $58b in 3-year notes; $42b in 10-year notes and $25b in 30-year bonds; repeats to keep most auction sizes unchanged for next several quarters.

- (CA) Canada PM Carney: US-Canada trade talks have not resumed - comments from Ottawa.

- (CA) Canada Oct Services PMI: 50.5 v 46.3 prior (1st expansion in 11 months, highest since Nov 2024).

- (US) OCT FINAL S&P SERVICES PMI: 54.8 V 55.2E (confirms 33rd month of expansion).

- (US) OCT ISM services index: 52.4 V 50.8E; New Orders Index: 56.2 v 51.0e (highest since Oct 2024); Prices Paid: 70.0 v 68.0e (highest since Oct 2022).

- (US) DOE CRUDE: +5.2M V 0ME; GASOLINE: -4.7M V -1.5ME; DISTILLATE: -0.6M V -1.5ME.

- (US) Fed's Miran (FOMC voter, dovish dissenter): See today's ADP data as a welcome surprise supporting interest rates could be lower.

- Among the six conservative Justices, Gorsuch sounded particularly skeptical of the Trump Admin arguments on tariff powers asserted under the International Emergency Economic Powers Act (IEEPA). Justices Gorsuch and Coney-Barett questioned whether Congress can abdicate its tariff powers to the President outside of a true national emergency such as the country being on a war footing, and wondered how Congress could reassert its power when the President could veto such legislation.

Europe

- (PL) Poland central bank (NBP) cuts base rate by 25bps to 4.25%; as expected.

- (IE) Ireland Oct Unemployment Rate: 5.0% v 5.1% prior.

- (PT) Portugal Q3 Unemployment Rate: 5.8% v 5.9% prior.

- (HU) Hungary Foreign Min Szijjarto: US and Hungary to sign large economic and energy package.

- (RU) Russian Def Min Belousov: Necessary to begin preparations immediately for nuclear tests; US is building up strategic weapons; Readiness of testing gound at (arctic island) testing ground Novaya Zemlya makes it possible to plan for tests on short notice.

- (CH) SNB Board Member Tschudin: Major challenge today is the US tariff policy, which has increased global uncertainty.

Levels as of 01:20 ET

- Nikkei 225 +1.5%, ASX 200 +0.3%, Hang Seng +1.4%; Shanghai Composite +0.8%; Kospi +1.3%.

- Equity S&P500 Futures flat; Nasdaq100 -0.1%; DAX -0.2%; FTSE100 -0.1%.

- EUR 1.1490-1.1509; JPY 153.80-154.14; AUD 0.6498-0.6519; NZD 0.5656-5769.

- Gold +0.1% at $3,982/oz; BTC +1.7% at $103,690; Crude Oil +0.5% at $59.87bbl; Copper +0.5% at $5.0170/lb.